u.s. small business administration · 2020-05-11 · small businesses –including sole...
TRANSCRIPT
U.S. Small BusinessAdministration
SBA Covid-19 ReliefJeffrey Boyce, Upstate NY Branch Manager
U.S. Small Business Administration
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1) Paycheck Protection Program (PPP)
The Paycheck Protection Program (“PPP”) authorizes up to $349B (round 1) and $310B (round 2) in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The loan amounts will be forgiven if:• The loan proceeds are used to cover payroll costs, and mortgage
interest, rent, and utility costs over the 8 week period after the loan is made; and• Employee FTEs and compensation levels are maintained.
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Who can apply?
Small businesses – including sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Private Nonprofits, faith-based organizations, veterans organizations, Tribal business concerns, community-owned rural hospitals.
Applicant must have been in operation since February 15, 2020.
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How do I apply?
Apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Visit www.sba.gov for a list of SBA lenders.Other regulated lenders will be available to make these loans once they are approved and enrolled in the program.
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PPP Terms
• 1% fixed rate. • No payments for 6 months (interest will accrue). • 2 year loan terms. • No prepayment penalties or loan fees. • No collateral or personal guarantee is required. • $10 million max.• 100% Forgivable
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What’s my loan amount?
Average Monthly Payroll X 2.5 = Loan Amount
Ø Calendar year 2019Ø Previous 12 monthsØ Feb 15 – Sept. 15, 2019 (any consecutive 12 wks)Ø Jan. 1, 2020 – Feb. 29, 2020
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What counts as payroll costs?
Payroll costs include: • Salary, wages, commissions, or tips (capped at $100,000 on an
annualized basis for each employee); • Employee benefits including costs for vacation, parental, family,
medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit; • State and local taxes assessed on compensation; and • For a sole proprietor or independent contractor: wages, commissions,
income, or net earnings from self-employment, capped at $100,000 on an annualized basis.
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How much of my loan will be forgiven?
• PPP funds should be spent upon disbursement from lender and for an 8-week period.• 75% or more of PPP loan must be spent on Payroll• 25% or less can be spent on mortgage interest, rent, and utilities
payments. • Re-establish or maintain pre-disaster staff and payroll levels.
• Loan forgiveness will be reduced if you decrease your full-time employee headcount.
• Loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
• Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
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2) Economic Injury Disaster Loan (EIDL)
Economic Injury Disaster Loans provides working capital to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic.• This program is for any small business with less than 500
employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by COVID-19.• Businesses in certain industries may have more than 500 employees
if they meet the SBA’s size standards for those industries.
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Eligibility
•Small Business with less than 500 employees.• (Sole proprietors, with or without employees,
independent contractors and self-employed persons.)
•Private non-profit organizations - 510(c)(3)•Veterans organizations - 501(c)(19) •Agriculture Enterprises (new)
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Ineligible Entities
• Applicant cannot be a state, local, or municipal government entity and cannot be a member of Congress.• Applicant is not in the business of lobbying.• Applicant does not derive more than one-third of gross annual revenue from
legal gambling activities.• Applicant is not engaged in any illegal activity (as defined by Federal
guidelines).• No principal of the Applicant with a 50 percent or greater ownership interest is
more than sixty (60) days delinquent on child support obligations.• Applicant does not present live performances of a prurient sexual nature or
derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
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Loan Terms
•Up to $2 million may be borrowed to cover operating expenses• 30 year term• 3.75% Small Business / 2.75% Private NFPs•Up to $200k without personal guarantee•Payments deferred for 12 months•Apply online at www.SBA.gov
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EIDL Emergency Advance
In response to the Coronavirus (COVID-19) pandemic, small business owners are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000.
This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.
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Best Practices
• Get Resource Partner help with a PPP application•Make a plan for how to use the money• Keep good records• Consider other local funding programs• Leverage chambers, trade associations, local economic
development groups
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SBA Debt Relief
•SBA will automatically pay 6 months of principal, interest, and any fees that borrowers owe for all current or new 7(a), 504, and Microloans disbursed prior to September 27, 2020.
Borrowers should contact their lender if they have any questions regarding this payment relief.
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